It’s been quite a while since I’ve felt the need to write about harmful claims practices that are outside of the requirement of “good faith and fair dealing.” In fact, these resurrected claims practices are from about 10-15 years ago, but have definitely made a comeback.
Those who are unaccustomed to dealing with insurance companies wouldn’t recognize the deceit, or the deck stacking But, let me set up a scenario for you so you can really understand this.
An IDI insured with a Guardian policy filed for disability ten years ago. In the beginning, she filed for physical disability, but then the cause of disability transitioned to depression and anxiety. after Guardian rejected her physical R&Ls. Guardian paid her for nearly ten years for mental and nervous causes. There is no limitation on her policy for mental and nervous claims. The benefit is significant. There was a forensic neuropsychological examination done by a worthless doctor that wasn’t credible. Claim continued to be paid.
Recently, the Guardian claims handler requested updated medical information for this insured’s PHYSICAL disability. This request came after a thorough update from a primary psychiatrist who supported behavioral disability, just a month ago.
And then, I recognized the scam. Like a lightbulb, I recognized one of the old egregious claims practices used by insurance companies that most IDI insureds would be likely to miss. Unum used to do this quite often in order to deny co-morbid claims.
Guardian probably reviewed the neuropshyche report, and the recent psychiatrist information and threw it out. Knowing there was a physical component to the disability, the claims handler requested PHYSICAL medical restrictions and limitations, which will also be rejected and the claim terminated. Ignoring mental R&Ls, is an egregious claims practice especially when the psychiatrist is very clear the individual can’t work. Remember, Guardian formerly rejected the insureds physical R&Ls and paid for mental causes.
This example is actually a pretty good case to show cause since it is the primary way insurance companies deal with co-morbidity. Claims handlers go out after all of the medical information from every doctor and have it reviewed by their own hacks with specialities dealing with each disability. Once they have eliminated each impairment separately, then the claim can be terminated.
Additionally, the Guardian claims handler in this case was an expert with the “bull.” I think the modern term is “gaslighting”, claiming how he was out to “help” the insured support her claim. Sure, but no thanks!
Insureds today have no idea what an insurance company can do internally to deny legitimately payable claims. Many of these awful claims practices disappeared for a while, and so insureds today still think they are on “easy street” when THEY ARE NOT. It’s my guess we’ll start hearing about more denials having to do with retroactive mental and nervous claims with 24 months limited benefits.
A retroactive M&N claim is one where Unum, for example, pays a claim for several years for physical disability and then suddenly decides it was really a M&N claim all along and should have been denied earlier. So, it’s denied now. The State of California had a hard time accepting this and asked Unum to stop, but it’s my guess we’ll start seeing this egregious claims practice again.
It’s clear to me as an expert in the field that “all bets are off.” Claims review is back in the outhouse as I predicted in my book. All insureds and claimants need to be careful. There is a way to support co-morbid claims to avoid this. If you have any questions please feel free to contact me.
By the way, we’re only 20 days from 1st Qtr. profitability reporting. This is why insurers have pulled old egregious claims practices out of the archives.
